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Strategic Scenario Planning Guide
- 1. Scenario Planning: a form of strategic conversation The What and How of scenario planning Timber Haaker (timber.haaker@novay.nl) The purpose of looking at the future is to disturb the present
- 2. “Change is the only constant” Eerste H-Lab The Future Now 2002 2012
- 3. Eerste H-Lab The Future Now
- 4. Those who can’t adapt disappear ..no need to know the future, but to be prepared for it (Pericles) Eerste H-Lab The Future Now
- 5. What is a (future) scenario? • “.. a narrative or visual about a possible future environment of a company or industry” • “… based on a coherent and internally consistent set of assumptions about driving forces and key relationships” • “… not just a “story” but also provides insight into a road to the future” Eerste H-Lab The Future Now Self regulation … Law & order Strict security measures … The public self … Reputation is king concern Strict rules
- 6. Voorbeeld: 2020 media futures (‘what media may look like in the year 2020’) Eerste H-Lab The Future Now Source: www.2020 mediafutures .ca
- 7. De waarde van Scenario Planning • Creeert een gedeeld bewustzijn van toekomstige business environment • Inspireert bij het formuleren van business en IT strategieen • Maakt anticiperen op verandering en What if? Analyses mogelijk • Helpt om business models, business strategien robuuster te maken Eerste H-Lab The Future Now “Misalignment between an organization and its environment has been recognised as a major cause of corporate death”
- 8. Het hoe van scenario planning
- 9. Future scenarios: methodology Drivers of Change Basic Trends Key Uncertainties Multiple scenarios • Trends en onzekerheden • social and market trends, • technology developments, • regulatory environment, • industry structure and competition • ….
- 10. Future scenarios: ontwikkel proces Identify relevant developments Identify key uncertainties Choose scenario axes Derive environment scenarios Trends and uncertainties in Legislation Society/users Business Technology Uncertain developments with high impact on intended system Two key uncertainties with two outcomes to create four different scenarios Find plausible outcomes of all key uncertainties and derive scenario narratives Hollywood Heaven heterogeneous homogeneous Technical interoperability high low acceptance Free Fight Guided Economy Local Heroes Guided economy: Business restricts interoperability Piracy, low content value ‘Content industry has failed to achieve a valuable experience, but that personal content exchange has lived up to its expectations’ FREE FIGHT: Very limited interoperability (some codecs) Piracy, many local business structures ‘Business has not been able to achieve a content experience that people are willing to pay for’ HOLLYWOOD HEAVEN: Excellent interoperability (codecs, DRM, devices) People easily control and exchange content ‘Business has succeeded in providing valuable, easy to use content experiences to customers’ LOCAL HEROES: Limited interoperability (codecs yes, DRM no) Legal environment supports fair business. ‘Industry has succeeded in providing content experiences. However, users may have to put in considerable effort in pursuit of these experiences’ Guided economy: Business restricts interoperability Piracy, low content value ‘Content industry has failed to achieve a valuable experience, but that personal content exchange has lived up to its expectations’ FREE FIGHT: Very limited interoperability (some codecs) Piracy, many local business structures ‘Business has not been able to achieve a content experience that people are willing to pay for’ HOLLYWOOD HEAVEN: Excellent interoperability (codecs, DRM, devices) People easily control and exchange content ‘Business has succeeded in providing valuable, easy to use content experiences to customers’ LOCAL HEROES: Limited interoperability (codecs yes, DRM no) Legal environment supports fair business. ‘Industry has succeeded in providing content experiences. However, users may have to put in considerable effort in pursuit of these experiences’ degree of uncertainty impact low high low high 1 3 4 2
- 11. Stap 1: definieer relevante trends en onzekerheden onzekerheden Key uncertainty Description Outcomes Legislation How restrictive will legislation be? Strict vs laissez faire Enforcement How strict will enforcement of legislation be? Strict vs laissez faire User demand To what extend do people want to use second screen applications? Unrelated activities vs complementary Revenue models What will be the prevailing revenue models for content exchange? User is paying vs provider or 3rd party is paying Interoperability To what extend will standards and interoperability emerge? Heterogeneous vs homogeneous
- 12. Stap 2,3: score factors op impact en onzekerheid; kies scenario assen Mate van onzekerheid impact low high low high 1 3 4 2
- 13. Stap 4: definieer en beschrijf scenarios • Local Heroes - Business has succeeded in providing valuable content experiences, but users have to put in considerable effort • Hollywood Heaven - Business has succeeded in providing valuable, easy to use content experiences to customers. • Guided Economy - Content industry has failed to provide a valuable experience, but personal content exchange is thriving • Free Fight - Business has not been able to provide a content experience that people are willing to pay for. Hollywood Heaven heterogeneous homogeneous Interoperability high low acceptance Free Fight Guided Economy Local Heroes
- 14. Scenarios en de cases Eerste H-Lab The Future Now
- 15. Verbinden van cases met toekomst scenarios • A use scenario is robust if it is feasible within all four future scenarios, i.e. the intended system functions are compatible with the assumptions underlying all future scenarios. Scenario axis 2 Scenario 2 Outcome 1 Outcome 2 Scenario axis 1 Outcome 1 Outcome 2 Scenario 4 Scenario 3 Scenario 1 Generate robust set of use scenarios
- 16. Contact Timber Haaker Principal advisor timber.haaker@novay.nl T: 053 485 03 48 m: 06 511 982 80 @timberhaaker Eerste H-Lab The Future Now
- 17. Meer voorbeelden
- 18. Eerste H-Lab The Future Now Source: World Economic Forum
- 19. De zorgmarkt in 2020 Eerste H-Lab The Future Now Source: De zorgmarkt in 2020, ATOS Consulting
- 21. Verbondenheid van context: los Value generation: social Value generation: corporate Verbondenheid van context: geintegreerd
Editor's Notes
- ICT biedt grenzeloze mogelijkheden. Maar hoe zorg je er nu voor, dat het ook echt waarde oplevert? Anders geformuleerd: Hoe verdien je aan innovatie? Dat is een vraag die mij voordurend bezig houdt en waar ik anderen bij help om deze beantwoord te krijgen. Bij waarde moet je niet alleen denken aan geld, maar ook aan immateriële waarden zoals kwaliteit van leven of zorg. Om de vragen beantwoord te krijgen, gebruik ik Novay-methodes als scenario planning of ontwikkel ik samen met de klant business modellen. Ook kan ik de innovatie bij een klant monitoren zodat een innovatieproces eventueel tussentijds kan worden bijgesteld. Mijn kracht ligt bij de economische vraagstukken binnen ICT. Met ICT kun je veel bereiken, maar het daadwerkelijk waarmaken is een ander verhaal. En daar lever ik graag mijn bijdrage aan. Specialisaties business modellen, business model innovatie voor ICT gedreven diensten, diensteninnovatie, impact evaluatie van ICT, innovatiemanagement In this presentation we address scenario planning: often referred to as an art of strategic conversation. In particular we’ll consider: Why scenario planning as a process and scenario’s as a resulting output are valuable. How can scenarios be build (and how we will do it – very quickly – together in de MCs) How can scenarios be applied in a valuable way.
- The speed of change in the business and IT environment is enormous, hard or impossible to predict (despite what forecasters may tell you) and usually outside one’s span of control or influence. Examples: Think of the intro of the euro in 2002, just 10 years ago (Optimism about economic effects, economic propserity) and compare with todays euro crisis (hard to predict but with huge business and IT impact) The speed at which social media applications have taken root and the impact on business (interaction with customers, Infor mation management, multi channeling) (Markt voor mobiele telefonie: Enkele jaren geleden werd 67% van de markt voor mobile verdeeld tussen Motorola, RIM, Nokia…(dat was voor de smart phone nu Apple, Samsung in de lead etc.))
- Eastman Kodak, once the third largest company in the world, had to file for bankruptcy protection in January 2012. Kodak’s business model was not robust due to a lack of alignment with evolving trends. Kodak missed the digital photography market by sticking to the existing business model based on fi lm sales for too long. This is the title of a Business School case study into Eastman Kodak. Misalignment between an organization and its environment has been recognised as a major cause of corporate death.
- …so: survival requires adaptation and for adaptation you need agility (and of course ideas and vision) So many reasons to adapt: Compete with disruptors: differentiate from competitors and find new ways to create value Technology changes: cloud computing, many devices, Customer demand: e.g. banks may essentially provide the same products but via different services channels Legislation: compliance issues All of these have impact on the CIO and his or her role. Future cannot be predicted, you don’t hav eknow it but need to be prepared for it -> that is were scenario thinking comes in!
- We developed a 2x2 scenario matrix based on two independent, critical uncertainties, in order to ask, What will our media be like by 2020 if, in the environment for the creative industries: Value generation is increasingly corporate; or increasingly social? Innovation diffusion is slow and risk averse; or extremely rapid and disruptive? Ministry of investment: A commercially driven, risk-averse environment dominated by the two biggest telecommunications companies in the country, who move in lock step with each other. Customers sign exclusivity contracts, and are locked into different content distribution cycles as a result. Paying for access is the same as paying for content. Lord of the Clouds: A commercially driven world of rapid technological innovation and adoption, affording new configurations of media partnerships, platforms and processes. Travel is rare but litigation is common. Anthill A Canadian media context characterized by slow-paced adoption of innovations, and an insubstantial level of funding for media development. Some welcome the inertia, embracing the “slow media” movement and eschewing “big content,” while others remain frustrated with the lack of opportunities for more traditional success. Canada has developed an Internet kill switch and policy designers work on a New Communications Act Wedia A world of rapid, disruptive, and socially driven change which sees many large institutions dissolve in the face of new forms and channels for invention and entrepreneurialism. Major content providers including CBC have splintered into fragmentary units manned by individual producers who do their own distribution. Ad campaigns and other long-term creative productions are increasingly rare, but remix is both rampant and legal
- Bullet one: clarify and challenge implicit and explicit assumptions Bullet two: avoid holding on to forecasts to much! (one dimensional futures) Bullet three: Isn’t one of the famous scenario planning examples one of Shell that considered a scenario with an oil crisis? Allowing them to anticipate the what if? Of such scenario? Bullet four: what are no regret moves that work in multiple futures? Where can you already expect change to be needed and where do you need to be agile?
- Stemmen waar de factoren moeten komen?
- Example of scenario in financial services. Two key factors (uncertainties) with two ‘extreme’ outcomes provided for four scenarios. In this case the factors are: Horizontal: type and locus of inovation (incumbents vs new entrants (specilised palyers) Vertical: market (local vs global open markets) The scenarios are given names that capture the essence of the scenario -> this is what you will do together with your peers in this afternoons sessions in the MCs
- Scenarios worden gebruikt voor vragen over benodigde / gewenste / mogelijke allianties. Vervolgens wordt gekeken naar de robuustheid van opties.